Sometime back in one of my posts on cash flows, I briefly mentioned situations that may make an enterprise experience persistent cash flow problems. Today I would like to elaborate a bit more on these situations. Yes – there are entrepreneurs whose businesses have cash flow problems year in and year out, yet they have little clue on what might be the problem. Are you one of those? If such problems are coupled with lack of good record keeping hence no good financial reports, together with poor understanding of the financial reports, such challenges may last forever or even cripple the business. Moreover, some entrepreneurs are reluctant to use external experts that might decode the problem and help implement solutions.
I trust you know that the business you are running is geared at making profits. Isn’t it Mr. Entrepreneur? If you don’t run that enterprise profitably and sustainably you will certainly not proceed far. Will you? As I mentioned earlier, cash flow challenges bring business to their knees faster than loss making – though the two are related. I would therefore like to explain briefly situations that you need to watch as an entrepreneur, if you experience persistent cash flow problems. Taking early care of these actually help avoid cash flow problems, and help promote business sustainability. Let’s consider the below.
I could expound more but let’s stop here for today. By the way, the first item of loss making above has a lot more, and I think I will treat this on its own in another blog. I think it’s advisable to decode it so that entrepreneurs who have limited knowledge can check areas where they need to take action for the sake of their enterprises. When you read statistics of the rate of business failures today you get concerned whether many entrepreneurs out there know what they are doing. It’s good to share knowledge as learning is a lifetime event. Don’t you agree with me?
Till then,
The Wise Entrepreneur